According to former employees of human resources startup Free Agency, CEO Sherveen Mashayekhi’s leadership style is holding the startup back as he seems to care more about demanding loyalty and controlling his employees than building a company.
The New York-based startup launched in 2019 with the novel idea of bringing the talent agency model popular in Hollywood and sports to other professions. Founders Alex Rothberg and Mashayekhi were clearly on to something as clients rolled in and tech talent flocked to work at the startup due to its mission.
But just as the startup began to prove product market fit in early 2022, co-founder Rothberg stepped back from a day-to-day role. This left Mashayekhi as the sole C-suite executive at the company. Employees said that once Rothberg left, the vibe began to shift.
TechCrunch spoke to 10 former employees and reviewed audio recordings, Slack messages and other materials from several others — both current and former — that show their firsthand accounts of how they felt Mashayekhi’s behavior toward employees started to deteriorate and his focus seemed to shift more toward aggressive micromanaging and exerting overreaching control.
Our sources said he began to use PTO as leverage — the company denies this but multiple Slack messages provided to TechCrunch show Mashayekhi denying PTO and rescinding it in multiple instances — and he told employees their nights and weekends weren’t “sacred.” Former employees also recall him “blowing up” on them or other colleagues if things weren’t going right. The company denies this, saying that due to the nature of the business, sometimes employees might need to work outside regular hours. The company also denied him yelling at colleagues and said that if anything, “Sherveen is overly transparent and communicative.”
Tip of the iceberg
Former employees said problems with Mashayekhi extended beyond leveraging PTO. They said he frequently told them that they were all replaceable and that he could run the company by himself if he needed to, while also begging for their loyalty. The company says this was only said to a specific employee, but multiple former employees recalled such instances.
“It was clear to me he wanted this cult-like following,” one former employee told TechCrunch. “I felt his end game wasn’t actually building a successful company.”
Former employees said he was obsessed with tracking what was said behind his back — once calling a meeting because employees had been “whispering” too much and he wanted to know why, they recalled. They told him that they were each other’s support system and he said “you cannot do that. I’m ending it because the reality is it’s hurting the business.”
The company said this action was taken as a result of “several” employees filing complaints about exclusionary cliques:
“As any company might, Free Agency encourages a positive workplace in which all team members feel supported, rather than a subset of the team garnering or wielding too much cultural power.”
A former employee recalled that after their direct manager left, Mashayekhi looked at it as a positive because in his eyes, their team wasn’t doing well because they “hadn’t been close enough…to my wisdom.”
Mashayekhi wouldn’t delegate seemingly anything to his managers or employees, former employees said, behavior they felt was odd considering he hired talent that had experience in the talent agency or HR fields. The company denies this.
“It was strange; he had no idea what he was doing but wouldn’t let anyone else do literally anything,” a former employee recalled.
A former employee said they felt Mashayekhi “would try to find things that got under my skin and dig into those more” or would purposefully tell someone’s direct reports negative things about them, knowing it would get back to them. The company responded that “Sherveen never purposefully told someone’s direct reports negative things about them, knowing it would get back to them.”
Employees felt subject to consistent pressure and loyalty tests which took time away from their actual jobs, former employees said. One example was employees being given seemingly random projects just to test how hard they could work. This instance was highlighted in a TikTok video from a prospective employee who said she was turned off by a reference to that in the interview process. The company denies this, but it was reiterated by multiple former employees that spoke to TechCrunch.
Another incident, during the company’s retreat to Denver, was an exercise where Mashayekhi paired up employees and asked them to go for a walk and talk about mission alignment with the company. When they returned, Mashayekhi asked them to close their eyes and raise their hand if their partner wasn’t aligned.
“I was thinking about McCarthyism,” one employee recalled about that instance. “Later someone said that they did open their eyes and they didn’t see any hands up and [Mashayekhi] freaked out.”
The company confirmed this happened but said that all the sessions were planned with an executive coach beforehand. The hired coach was not present for this exercise.
Former employees said that this seeming hunger for loyalty and power didn’t just contribute to a negative company culture though: It had a damaging impact on the actual business too.
They reported that Mashayekhi seemed to care more about what the company looked like on the outside than how it was run on the inside. Former employees said that he spent more time decking out the company’s sizable New York Flatiron office with thousands of dollars of tech, and hosting industry events, but spending little time on the company’s actual business practices or operations. Free Agency denies this.
“I had to manipulate him into taking money from the clients,” one recalled.
Others agreed. One former employee added that they felt he had “almost zero” emphasis on getting invoices paid, with his reasoning being that the company didn’t actually need clients to pay — the company’s main revenue stream — because it had investor money.
What stood out to former employees the most though, in their collective opinions, was his perceived inability to accept his own role in any of the company’s issues. Employees reported having multiple meetings about how things could be done differently or be improved, but nothing ever got implemented unless the idea came from Mashayekhi himself. The company denies this.
“I know that most CEOs are kind of narcissistic and crazy but this [was] on a new level,” a former employee said.
When the company made its retreat to Denver last summer, former employees said he started the week off by saying that the company would cease to exist in two years if employees didn’t step up. The company denies Mashayekhi said this, but acknowledged that he did provide a financial update, but that it wasn’t directed at employee performance. Former employees said it felt otherwise, as multiple sources recalled him saying specifically that they as employees weren’t doing enough.
The Free Agency team spent the week continuing through a brainstorming exercise to find out that Mashayekhi still didn’t like their ideas, former employees said, and didn’t see himself at fault for any of the issues.
On the last day of the trip, an employee told him his ego and lack of self-awareness were what was holding the company back. Mashayekhi denies fighting back, but every former employee who spoke to TechCrunch said that he did, and that he later told new employees that he didn’t agree with what was said about his leadership. The company agrees that Mashayekhi did address this with new team members.
“His responses to what they were saying was even more eye-opening, he was so unreceptive,” a former employee recalled. “He refused to take responsibility for what he does wrong. He refused. The best way to describe him on this trip would be immature and childlike, unable to hold himself accountable.”
Former employees said that his behavior at the retreat was just one example of what they perceived as behavior not befitting a company CEO.
“He would throw me into conference rooms, berate me and make it seem like he was the victim,” a former talent agent said. “There was a lack of understanding that this is a CEO and I’m an employee. He thought we are equals and he’s disadvantaged.”
Mashayekhi’s behavior sparked six employees last July to take a voluntary severance offering made to those who no longer felt working at the company was for them, our sources said, and only one had anything lined up. When they left, former employees said Mashayekhi called them names including “back fat” and “baggage” and frequently disparaged them to new employees. The company denied some of the specific verbiage used:
“Sherveen does not recall ever using or being familiar with the term “back fat.” Free Agency strives for a performance-driven culture. After many visible evolutions and changes throughout 2022, it was essential for Free Agency leadership to transparently share context with new team members as to prior team structure, results, systems, and related issues.”
Former employees also said they felt that Mashayekhi took it personally in general when employees left the company of their own volition, and would consider it a “betrayal.”
The company clarified that Mashayekhi would in fact take some of these instances personally because he considered some of these employees to be friends outside of work as well:
“As is often the case with startup founders and their teams, Sherveen established deep relationships with early employees, often serving as a mentor and friend. As an example, Sherveen was often invited to gatherings outside the office in social settings like birthday parties and dinners with their families. As a result, Sherveen had more of an emotional response than might have been warranted when these relationships were coming to an end. Sherveen has always ultimately offered support to individuals on their way out, including extension of benefits, equipment usage, mentorship, and job search advice.”
Former employees’ issues stemming from the CEO’s office impacted the business from the outside too.
Multiple former employees recalled doing cold outreach as part of their position and getting replies that people didn’t want to work with Mashayekhi. Some could also recall instances they witnessed of Mashayekhi berating or putting down potential partners and sponsors, further limiting opportunities for the company. The company responded as follows when presented with these accusations:
“Free Agency takes its responsibility to build robust relationships with vendors and partners very seriously. Oftentimes, and especially in 2022 and 2023, that means respectful, aggressive negotiations to ensure that the company, team, and end-users are getting the best deal possible.”
Overall, Free Agency denies the characterization of the company shared with TechCrunch by former employees, but does acknowledge some instances where its past behavior fell short of expectations:
“Every action we take, every decision we make at Free Agency will not always be perfect when viewed through a backwards looking lens. As a young startup, we are still finding our way. On occasion, we will stumble, as we have at times in trying to establish and strengthen a client-first, ownership-based culture within Free Agency.”
Free Agency CEO seems to care more about control than the company, former employees say by Rebecca Szkutak originally published on TechCrunch
